Nomura’s Laser Digital Expands Crypto Venture Capital Arm with New Partner

Bybit Gets Outline Approval to Operate in KazakhstanBybit, the cryptocurrency spot and derivatives trading platform, is expanding its operations with a recent “in-principle” approval from the Astana Financial Services Authority (AFSA) in Kazakhstan. This approval allows Bybit to operate as a digital asset trading facility and custody services provider at the Astana International Financial Centre (AIFC).Photo by Engin Akyurt on PexelsExpanding area of operationsBen Zhou, the co-founder and CEO of Bybit, expressed his belief in the promising potential of the Commonwealth of Independent States (CIS) region for the growth of the crypto industry. He also emphasized Bybit’s commitment to complying with local regulations, following the recent scrutiny the company faced in Japan for operating without proper registration.To obtain permanent authorization to serve the local market, Bybit must fulfill certain pre-conditions specified in the in-principle approval and complete the application process. In April, it emerged that the company had established its global headquarters in Dubai, where it has already secured “in-principle” approval to operate a virtual assets business. Bybit has also been active in Hong Kong and is in the process of obtaining a license to trade in the Chinese autonomous territory.Debit card and lending servicesAs well as a geographical expansion, in recent months Bybit has also been expanding its service offering. On May 2, the exchange announced the introduction of crypto lending services for its users. This addition allows users to lend and borrow cryptocurrencies through the Bybit platform, providing them with more opportunities to maximize their holdings.Earlier this year, Bybit collaborated with Mastercard to launch a new debit card tailored for cryptocurrency payments. This partnership aimed to bridge the gap between traditional financial systems and the growing crypto ecosystem, allowing users to spend their cryptocurrencies seamlessly in everyday transactions.Kazakhstan’s crypto strategyKazakhstan got off to a difficult start with crypto. Once crypto miners were banished from China, many of them moved operations to Kazakhstan, putting pressure on the local power grid.The local administration has since gotten to grips with the industry, restricting crypto miners’ access to cheap electricity. Bybit’s decision to offer services in Kazakhstan aligns with the country’s current efforts to position itself as a regional hub for crypto, mining, and blockchain.In February, local officials implemented a mandate that requires 75% of revenue generated from crypto mining to be sold through a crypto exchange, with the aim of combating tax evasion.CBDC developmentFurthermore, Kazakhstan has been actively exploring the development of a central bank digital currency (CBDC) and is currently in the pilot phase of its implementation. The introduction of a CBDC can potentially revolutionize the country’s financial landscape, offering faster and more efficient digital transactions while maintaining regulatory oversight.Bybit’s pre-approval in Kazakhstan signifies the company’s strategic expansion into a region with a favorable regulatory environment for cryptocurrencies. As the crypto industry continues to evolve, partnerships between traditional financial institutions and crypto exchanges, like the collaboration between Bybit and Mastercard, demonstrate the increasing integration and acceptance of digital assets in mainstream financial systems.

China’s Crypto Crackdown Reveals Capital Control LoopholesChinese authorities have been stepping up their efforts to crack down on cryptocurrency-related crimes, and with that, uncovering how digital currencies are being used to bypass strict capital controls imposed by Beijing.China may be a few years into a crackdown against the use of cryptocurrencies but despite that, their use and particularly their use for illicit purposes continue. That’s according to a report on Wednesday by the South China Morning Post (SCMP).Photo by Christian Lue on UnsplashCombating capital outflowsThe rising trend of capital outflows has prompted Chinese authorities to take action. Two prominent cases illustrate the extent of these illegal activities and the value of assets seized.In Jingmen, a city in Hubei province, police disclosed details of an online gambling case involving digital currencies used to evade regulation. The case has implicated over 50,000 individuals and a turnover of billions of dollars. Although the specific virtual currency was not mentioned, authorities revealed that they had frozen multiple accounts with a combined value of $160 million.Meanwhile, in Shanxi province, police solved a money laundering case linked to 380 million yuan worth of USDT, the US dollar stablecoin issued by Tether. China’s State Administration of Foreign Exchange is responsible for monitoring cross-border capital flows. Accordingly, it has taken steps to curb these illicit activities. Late last month, it fined ten firms in order to maintain order in the forex market.Digital yuan developmentThese recent cryptocurrency cases have exposed loopholes in China’s capital control system. Crypto mining and trading have long been banned by Chinese regulators. As an alternative, China has been actively developing its own central bank digital currency (CBDC), known as the digital yuan or e-CNY. 2023 has seen a raft of measures taken by various regional administrators throughout China to bring about further e-CNY adoption.However, the ban on cryptocurrencies and the launch of the e-CNY have driven many miners and traders underground or to overseas locations such as Hong Kong, which ironically, is vying to become a cryptocurrency hub. The continued depreciation of the yuan against the US dollar has intensified capital outflow pressures.Chinese bonds sell-offInternationally, fund managers have been selling significant amounts of Chinese securities since 2021. That goes against the current regional trend which sees emerging Asian markets experiencing substantial inflows of funds during the same period, according to the Institute of International Finance.That market activity has been in response to Chinese policies and escalating US-China tensions. An Atlantic Council report highlights that international institutional investors have been net sellers of approximately 1 trillion yuan in Chinese bonds since early 2022.China’s efforts to control capital outflows and stabilize the yuan’s value face ongoing challenges, as cryptocurrency-related crimes persist. While the crackdown exposes weaknesses in the country’s capital control system, it also underscores the difficulty authorities will have globally in trying to control digital currency use.

KCS Says Illegal Forex Transactions for Crypto Purchases Amount to $7.7BOver the past five years, the total value of illegal foreign exchange transactions associated with virtual asset purchases has amounted to approximately KRW 10.4 trillion ($7.7 billion), according to the Korea Customs Service’s report received on Thursday by Go Yong-jin, a member of the Democratic Party of Korea on the National Assembly’s Strategy and Finance Committee.Photo by Sasun Bughdaryan on Unsplash“Illegal transactions on foreign exchanges for the purchase of virtual assets are occurring due to the higher prices of virtual assets in Korea compared to prices abroad,” Go explained.Crimes incited by crypto waveThe data showed that the number of violations subject to fines was 6,066, involving forex transactions of KRW 2.3 trillion. In particular, violations made in 2020 and 2022 accounted for the majority, making up 78.7% with 4,775 cases and a value of KRW 1.9 trillion, or 83.7% of the cumulative total. This indicates a substantial increase in illegal activities during the periods when the crypto investment frenzy in Korea was at its peak.Uncovering key patternsWhile foreign exchange transactions were primarily intended for acquiring virtual assets, they were often disguised as trade payments. There were also cases where individuals withdrew foreign currency from overseas ATMs to buy cryptocurrencies. These two scenarios were the most prevalent cases for which fines were imposed. More specifically, among the 6,066 violations, there were 4,518 instances of the former and 1,486 cases of the latter. The transferred funds amounted to KRW 1.9 trillion and KRW 407 billion, respectively.During the five-year period, individuals involved in 93 cases of these forex activities — collectively valued at KRW 8.1 trillion — were penalized following the referral of their cases to prosecutors. In particular, the violations in 2022 accounted for 70.3% (KRW 5.7 trillion). This could be accredited to the breakout of suspicious large-scale forex transactions last year, which prompted local authorities such as the Korea Customs Service and the Financial Supervisory Service (FSS) to initiate planned investigations.The most common type of illegal foreign exchange transaction cases referred to prosecutors was similar to those that incurred fines: overseas remittances disguised as trade payments, constituting 49.9% (KRW 4 trillion) of all cases. Transferring foreign currency via unregistered entities was the second most common violation, making up 47.2% (KRW 3.8 trillion). These transfers breach the Foreign Exchange Transactions Act and are always reported to prosecutors.Go thereby called on authorities to intensify crackdowns on illegal forex transactions aimed at trading virtual assets and to revise foreign exchange regulations accordingly.